The following statement was made today by Peter Smith, Chairman of RAC plc, the motoring and vehicle solutions company, at the Company’s Annual General Meeting:
The following statement was made today by Peter Smith, Chairman of RAC plc, the motoring and vehicle solutions company, at the Company’s Annual General Meeting:
RAC plc has performed well in the first quarter, trading in line with our expectations and ahead of last year. We have made further progress towards focusing the Company on its core activities with the disposal of our mechanical handling operations in Belgium and the UK and of our small Isuzu Truck importership. These transactions will be earnings enhancing in 2004, and we are continuing negotiations for the disposal of Lex Manutention, our remaining mechanical handling business. The proceeds of these transactions, together with our operational cash flow, have further improved the financial strength of the Company.
Consumer Services
The strong momentum that has been built since we acquired RAC has continued. Our Roadside business had a good quarter, delivering excellent operational performance through the close matching of rescue resources with demand and by achieving high service standards. Our motoring services businesses have again performed well and we are focusing on our goal of increasing the number of products our members buy from us through the use of the CCM system which was successfully implemented in the final quarter of 2003. Trading conditions for RAC Auto WIndscreens remain challenging.
Business Services
We are working with the MoD to finalise the C vehicles contract for which we are preferred bidder, and are implementing the major contracts won in 2003. We remain focused on our target sectors; insurance, defence, airside, vehicle manufacturers and utilities.
Lex Vehicle Leasing continues to perform well, with the fleet growing to 130,000 vehicles, which includes the vehicles taken on from Ford Financial, an agreement announced late in 2003. The management team is successfully implementing this substantial new contract, which will be earnings enhancing in 2005. The used car market has been stronger than expected with improved residual values during the first quarter.
RAC Business Solutions has started the year well and has maintained the growth seen in 2003.
Hyundai delivered a good first quarter with a market share of 1.54% following an increase in registrations of 33% primarily reflecting the success of the award winning Getz supermini.
Lex Auto Logistics has continued to benefit from the additional Leyland margin, which is in line with our expectations.
Management
As we announced on 11 December 2003 Debbie Hewitt, our Group HR Director, has been appointed Managing Director of our Roadside business with effect from 10 May 2004. We are pleased to welcome Jill Nealon as her successor. Jill will join the Executive Board and commence her new role on 4 May 2004.
Prospects
As we said in our 2003 annual report we expect to see continuing growth in 2004 despite the anticipated reduced contribution from Paccar. The Company is trading in line with these expectations. The improvements we have made in systems and infrastructure together with the potential we have to develop our customer base, offer significant growth opportunities in the medium term.
Enquiries:
Richard Pennycook
Group Finance Director, 07889 309988
Niall Addison
Group Finance & Investor Relations Manager, 07764 624701
Neil Lovell
Corporate Communications Director, 01628 843728